Sprint files suit to block AT&T-T-Mobile merger

Posted September 7, 2011 - 04:39
by
Emma Woollacott

Sprint has filed a lawsuit aimed at preventing the proposed AT&T-T-Mobile merger, adding its voice to that of the Justice Department to claim that the deal would increase prices and hamper competition.

The lawsuit was filed in federal court in the District of Columbia, the same court in which the Justice Department last week filed its own legal challenge to the deal.

"With today’s legal action, we are continuing that advocacy on behalf of consumers and competition, and expect to contribute our expertise and resources in proving that the proposed transaction is illegal."

Like the Justice Department, Sprint says the merger would harm competition and the consumer, increasing prices and reducing innovation.

It would entrench the duopoly control of AT&T and Verizon, says Sprint, giving them control of more than three-quarters of the wireless market and 90 percent of the profits.

And it would be bad for independent wireless carriers too, says Sprint. A combined AT&T and T-Mobile would be able to use its control over backhaul, roaming and spectrum to exclude competitors, raise their costs and restrict their access to handsets. The damage, it says, would be 'irreparable'.

AT&T has a lot riding on the deal. If it fails, it's committed to paying Deutsche Telekom - T-Mobile's parent company - $3 billion in cash and will have to hand over wireless spectrum worth about the same amount.

It may be forced into making further concessions, for example offering special discounts on the use of its national wireless network to local carriers.